Posted on by The Daily Shot Editor: Lev Borodovsky

More Americans with full-time jobs are moonlighting

The Daily Shot: 12-Dec-23
• The United States
• Canada
• The United Kingdom
• The Eurozone
• Europe
• Japan
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Global Developments
• Food for Thought

 

The United States

1. Let’s begin with some updates on inflation.
 
• Nomura estimates an uptick in the core CPI in November, …
 
Source: Nomura Securities  
 
… as some volatile items rebound.
 
Source: Nomura Securities  
 
Hotel costs and medical care likely boosted the supercore CPI.
 
Source: Nomura Securities  
 
• The right-tail distribution of price changes has shifted partly back to its pre-pandemic position.
 
Source: Goldman Sachs  
 
• Slower gains in labor costs point to a moderation in services inflation.
 
Source: Oxford Economics  
 
• Leading indicators continue to signal slower inflation ahead.
 
Source: Deutsche Bank Research  
 
• Morgan Stanley expects headline inflation to decline to the 2% target in 2025, …
 
Source: Morgan Stanley Research  
 
… as the relative price of core goods versus services narrows closer toward the historical trend.
 
Source: Morgan Stanley Research  
 
• Over the long run, demographics will put downward pressure on inflation.
 
Source: BofA Global Research  
 
• The NY Fed’s consumer survey showed falling inflation expectations last month.
 

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2. Next, let’s look at some rental cost trends.
 
• Alternative measures of new-lease rent growth:
 
Source: Goldman Sachs; @MikeZaccardi  
 
• Cities reporting negative rent growth:
 
Source: Apartment List  
 
• Apartment vacancy rates (now above pre-COVID levels):
 
Source: Apartment List  

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3. Here is an overview of US consumers’ misconceptions about the economy:
 
Source: @financialtimes   Read full article  
 
4. Households’ interest income is growing.
 
Source: Oxford Economics  
 
5. Financial conditions continue to ease.
 

 
6. Finally, we have some data on the labor market.
 
• More Americans with full-time jobs are moonlighting.
 

 
• Job openings are increasingly driven by small businesses.
 
Source: @WSJ   Read full article  
 
• Permanent job losses remain low but have been trending up.
 
Source: Wells Fargo Securities  
 
• This chart shows the year-to-date employment gains by industry.
 
Source: Wells Fargo Securities  

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Canada

1. The population boom is expected to ease over the coming years.
 
Source: Oxford Economics  
 
2. Migrant wages tend to converge with Canadian-born over time.
 
Source: Oxford Economics  
 
3. Canada’s GDP per capita has diverged from that of the US.
 
Source: PGM Global  

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The United Kingdom

1. PMI data signals easing services inflation.
 
Source: Pantheon Macroeconomics  
 
2. Surveys point to higher unemployment and softer wage growth ahead.
 
Source: Barclays Research  
 
3. Who is getting skilled-work visas?
 
Source: The Economist   Read full article  

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The Eurozone

1. Economists downgraded Germany’s 2024 GDP growth forecasts again.
 

 
Here is the consensus projection for Spain.
 

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2. This table shows some scenarios for the ECB’s policy stance this week (from ING).
 
Source: ING  
 
• Capital Economics expects five 25 bps rate cuts next year.
 
Source: Capital Economics  

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3. Germany’s shares continue to surge.
 

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Europe

1. Norway’s core inflation eased last month.
 

 
Source: @economics   Read full article  
 
Here is the 2-year yield.
 

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2. Who are the largest dairy producers in the EU?
 
Source: Eurostat   Read full article  
 
3. This chart shows the share of adults with low educational attainment.
 
Source: Eurostat   Read full article  

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Japan

1. The markets now see almost zero chance of a rate hike this month.
 

 
Source: @economics   Read full article  

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2. Machine tool orders were relatively soft last month.
 

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Asia-Pacific

1. Taiwan’s exports were above last year’s levels in November.
 

 
The trade surplus topped expectations.
 

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2. Australia’s consumer confidence edged higher this month.
 

 
Business sentiment is rolling over.
 

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China

1. Economic activity is starting to improve.
 
Source: MRB Partners  
 
2. Local government debt increasingly dominates China’s bond market.
 
Source: @WSJ   Read full article  
 
3. This chart shows China’s imports of semiconductor manufacturing equipment.
 
Source: Rhodium Group   Read full article  
 
4. Hong Kong’s voter turnout tumbled this year.
 
Source: @bpolitics   Read full article  

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Emerging Markets

1. Let’s begin with some updates on India.
 
• The stock market continues to rally.
 

 
• India experienced a capex boom over the past few years alongside a surge in credit growth. (2 charts)
 
Source: Alpine Macro  
 
Source: Alpine Macro  
 
• The rise in personal loans has not led to a pickup in consumption growth. According to Alpine Macro, some borrowings may have been channeled to asset markets.
 
Source: Alpine Macro  

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2. Turkey’s industrial production declined again in October.
 

 
The unemployment rate continues to fall.
 

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3. Here is a look at foreign investment in Vietnam.
 
Source: Reuters   Read full article  
 
4. Ukraine’s year-over-year GDP growth topped expectations.
 

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Cryptocurrency

1. Bitcoin saw a sharp pullback on Monday, with leveraged players forced to exit.
 

 
2. Crypto returns are still positive month-to-date.
 

 
3. Crypto funds saw an 11th straight week of inflows, although the pace has slowed.
 
Source: CoinShares   Read full article  
 
• Short-bitcoin products attracted fresh capital while investors exited multi-asset funds last week.
 
Source: CoinShares   Read full article  

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4. Solana NFT marketplaces have experienced a rise in trading volumes.
 
Source: @MessariCrypto  
 
5. Blockchain developer activity remains elevated despite the slowdown in recent years.
 
Source: Global X ETFs   Read full article  

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Commodities

1. Gold is back below $2000/oz.
 

 
• Central banks bought almost as much gold this year as in 2022.
 
Source: S&P Dow Jones Indices  

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2. Lithium prices continue to sink.
 

 
3. Flash memory prices are rebounding.
 

 
4. Instant coffee prices are on the rise.
 

 
Source: @markets   Read full article  

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5. Sugar futures continue to sink.
 

 
6. Avocado prices have been moderating.
 

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Energy

1. Brent crude contango has intensified.
 

 

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2. This chart shows the Capital Economics forecast for OPEC production.
 
Source: Capital Economics  
 
3. Oil supply is up year-to-date despite the OPEC+ cuts.
 
Source: Numera Analytics (@NumeraAnalytics)  
 
4. Uranium prices keep climbing.
 

 
• This chart shows US suppliers of enriched uranium.
 
Source: Sophie Caronello, @TheTerminal, Bloomberg Finance L.P.   Read full article  

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Equities

1. The Dow rally looks stretched.
 

 
2. On average, December has been the third-best month for the S&P 500 during pre-election years. Could we see another rally to close out the year? (2 charts)
 
Source: @ryandetrick  
 
Source: @ryandetrick  

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3. The S&P 500 typically performs well during non-recession election years.
 
Source: Truist Advisory Services  
 
4. IPO activity has been relatively soft.
 
Source: @FactSet   Read full article  
 
Post-IPO stocks rebounded since the October slump but continue to lag the Nasdaq 100.
 

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5. High total yields and rising buybacks could partially limit equity downside.
 
Source: Morgan Stanley Research  
 
6. Small-cap margins have diverged from large caps.
 
Source: PGM Global  
 
Small-cap earnings revisions breadth has also been lagging.
 
Source: Morgan Stanley Research; @dailychartbook  

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7. In aggregate, analysts expect the S&P 500 to top 5000 by the end of next year.
 
Source: @FactSet   Read full article  
 
Here are the target gains by sectror.
 
Source: @FactSet   Read full article  

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8. This chart shows US tech mega-caps in perspective.
 
Source: @MichaelAArouet, @DuncanLamont2  

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Credit

1. Weekly bankruptcy filings rose as the Fed hiked rates, although still below prior cycle highs.
 
Source: Torsten Slok, Apollo  
 
S&P Global’s data, which covers middle-market and larger firms, shows bankruptcy filings slowing last month.
 
Source: S&P Global Market Intelligence  

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2. Investment-grade and high-yield firms show diverging corporate balance sheet strength.
 
Source: Oxford Economics  
 
European HY fundamentals are stronger than those of US peers.
 
Source: Oxford Economics  

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3. Here is a look at leveraged loan and high-yield bond issuance as well as the use of proceeds.
 
Source: Deutsche Bank Research  

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Global Developments

1. Will global economic activity surprise to the upside again in 2024?
 
Source: Truist Advisory Services  
 
2. China’s deflation tends to signal a global recession.
 
Source: @JeffreyKleintop  
 
3. Leading indicators suggest that factory activity will be rebounding in the months ahead.
 
Source: Deutsche Bank Research  

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Food for Thought

1. Who is talking about AI?
 
Source: @FactSet   Read full article  
 
2. Exposure to AI-driven automation:
 
Source: Goldman Sachs  
 
3. High demand for pilots:
 
Source: @WSJ   Read full article  
 
4. Views on the death penalty:
 
Source: Gallup   Read full article  
 
5. Getting the news on TikTok:
 
Source: Pew Research Center   Read full article  
 
6. US land-cover changes:
 
Source: National Climate Assessment   Read full article  
 
7. Average length of US military service:
 
Source: CBO  

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